6 ms·

Please explain what you mean by "Not wise to compare to valuations of established businesses in one vertical."

• mrgordon 12y ago
  The poster meant that Uber and Airbnb don't have the same cost structure as the existing behemoths in their respective industries so the valuations aren't comparable. For example, Airbnb doesn't need to pay rent for their properties and an unfilled vacancy doesn't typically cost them anything. Another issue is that Hilton, Starwood, and most of their competitors operate so many properties in the US that they are very sensitive to exchange rates and evolving travel preferences: http://www.cnbc.com/id/102435380# http://www.cnbc.com/id/102435380#.
  • vskarine 12y ago
    That makes sense. Thanks for explaining. I think all these things also affect AirBnB but through the hosts. I guess AirBnB can have relatively fixed costs of operation (with volatile revenue) which is probably better than having volatile operational costs.
• pbreit 12y ago
  People used to say that Uber can't get that big since the taxi market in [city] is only x. And then Uber quickly grew its business in said city to 5x. Exhibit A: http://fivethirtyeight.com/features/uber-isnt-worth-17-billion/ http://fivethirtyeight.com/features/uber-isnt-worth-17-billi...